Brazilian long term rentals service QuintoAndar raises $64M Series C

There’s quite a bit wrong with real estate in Brazil, according to QuintoAndar founder and CEO Gabriel Braga. Those seeking long term rentals in big Brazilian cities like São Paulo and Rio de Janeiro are throttled by bureaucratic policies that enforce outrageously expensive deposits, the requirement of local cosigners and sky-high insurance fees. On the supply side, amateur landlords are tunnel visioned on making money from transactions, creating a low quality of service and many wasted hours of apartment hunting for tenants.

This is where QuintoAndar, a São Paulo-based rental marketplace, comes in. Now, the 600-person company has raised a $64 million (R$ 250 million) round led by General Atlantic to accelerate expansion in Brazil. Existing investors Kaszek Ventures, Qualcomm Ventures and QED also participated in the round.

Marketplaces like OLX, Craigslist and VivaReal all surface listings for rentals in Brazil. But QuintoAndar wants to set itself apart as an end-to-end service that lets users search, book, rent and advertise rental properties. The site provides the listings, allows users to schedule tenant visits to the property (the founder says more than 86,000 property showings were booked in October), and processes the transactions. Landlords and tenants negotiate through the platform, where they also sign the contract. Braga says this process is much easier than working with – and paying for – an agent. QuintoAndar guarantees landlords that they’ll get rent every month as well as protection against any damages the renter may make to a property. Contracts are digitized and renters don’t need to physically go to a notary to finalize a contract, allowing landlords to be anywhere. If a property needs a repair or maintenance, users can tap into QuintoAndar’s network of service providers through the site.

The company believes there’s a big opportunity to make renting in Brazil more efficient. “20% of the population in Brazil lives in rented properties, and the sentiment toward buying homes in Brazil is changing,” says Braga, citing data from the Brazilian Institute of Geography and Statistics. Brazilians are seeing home ownership as less of a long term goal and are opting to rent, meaning more money in the bank and freedom to relocate.

Brazil remains undercapitalized relative to other countries, meaning smaller check sizes for early stage tech companies. So a private equity growth round like this represents a solid deal for tech-enabled businesses looking to gain market share of the world’s fifth most populous country.

Before the private equity round, QuintoAndar had raised $25 million. General Atlantic is fairly active in Latin America, with 18 portfolio companies based in the region, according to its website. “GA is one of the largest investors in online marketplaces across the globe combined with deep pockets, a long-term mindset, and a strong commitment and success within Latin America,” says the founder of the GA partnership.

Braga certainly believes Brazil is a large enough market to build a digital service for people who want to rent properties, but doesn’t want to stop there. The new capital will enable QuintoAndar to consolidate its already-existing operations in Belo Horizonte, Brasília and Goiânia, and start new operations in Porto Alegre and Curitiba. The investment will also be used to create a partnership system with the country’s main real-estate agencies who will be able to use the platform to offer QuintoAndar’s renting experience to clients, both landlords and tenants.